Mazda to build Toyota-branded '2' in Mexico

Mazda's latest initiative to boost its coffers is a model based on the Mazda2, but wearing Toyota badges for the North American market.

The car will be built at Mazda's new plant at Salamanca City in Mexico for sale through Toyota dealerships in North America at the rate of about 50,000 a year. Production of the new car is set to commence during 2015. Since the plant can handle up to 140,000 vehicles a year – from a staff of 3000 employed there – it's not likely the 'Toyota 2' will be the only vehicle manufactured at the factory.

The Mexican car will have no bearing on Mazda's local marketing strategy or model range roll-out in Australia.

"We in Australia will continue to source our cars from Japan – and we don't have any plans to change that," explained Mazda Australia's Public Relations Manager, Steve Maciver.

"Obviously... [the Mexican-built car] helps production efficiency, it helps improve the bottom line. And of course the flow-on effect for every region, including ourselves, can only be a positive one for Mazda."

Mazda has been proactively drumming up business to offset a recent revenue shortfall and the latest news follows an issue of shares to bolster the company's finances. It's not the first time the company has issued more shares to raise capital – an earlier occasion was aimed at attracting investment to fund the development of hybrid-drive technology.

This latest share issue was prompted principally by a global market downturn and two natural disasters affecting the company last year: the tsunami that hit northern Japan and the floods affecting Thailand.

The Toyota venture is the second project of its kind to come from Mazda this year; the manufacturer announced earlier it would develop and build an Alfa Romeo sports car based on the MX-5. And other projects in a similar vein are likely to be in the pipeline, although there's no word on those yet, according to Mr Maciver.

"[Mazda Chairman] Yamanouchi-san has been out publicly saying that he's actively looking for alliances with other manufacturers and other car companies – so it is something we're looking to do," Mr Maciver told motoring.com.au this morning.

Little is known about the car to be built in Mexico, or why Toyota sees a need to complement its own Yaris design with the Mazda model. The local Mazda spokesman couldn't reveal any further information either.

"I'm not in a position to discuss the ins and outs of either what Mazda2 is going to look like or what this particular Toyota product is going to look like as well. I'm sure all will be revealed in due course, but of course... This car is coming off a Mazda2 platform... and obviously the Yaris and Mazda2 are similar in size at the moment. I guess we'll just have to wait and see what's announced nearer the time."

Mr Maciver hinted that Mazda's SKYACTIV technology may be a key reason for Toyota handing this project to Mazda.

"SKYACTIV technology is going to be the future of Mazda product moving forward, so essentially, everything from B car [Mazda2] right through to SUV we can put on that platform – and that's the reason we developed SKYACTIV... for that to happen."

Alternatively, a rotary range-extended plug-in hybrid drivetrain may be in the works for the Mexican Mazda. Word from the Australian International Motor Show in Sydney last month revealed that Mazda will introduce its first hybrid to market next year. That vehicle is expected to be a Mazda3 with a rotary range extending engine and Prius plug-in hybrid drive technology licensed from Toyota.

"We can definitely see some benefits for that engine as a range-extender," said Mr Maciver. "We've got people who are senior executive officers and managers at Mazda who are big fans of rotary and can see some real benefit in it. Certainly while these guys are there the passion's still there for rotary, which is very much part of the company. The plans will be to continue developing that and see where it takes us."

In a smaller package – such as the Mazda2 – the light and compact rotary engine has the potential to deliver even greater efficiency gains than a conventional piston engine in a plug-in hybrid – such as Holden's Volt, to use one example.

"The challenges we've had with rotary thus far are it's not as fuel-efficient as it could be," said Mr Maciver. "And we also need to try and extract more power out of it – purely as a stand-alone powerplant. But as a range-extender obviously the engineers have picked up some potential for it..."